The chancellor has said the budget is “non-negotiable” on a visit to China in the face of volatile markets back in the UK.
Rachel Reeves flew out on Friday after ignoring calls from opposition parties to cancel the long-planned trip because of economic turmoil at home.
The past week has seen a drop in the pound and an increase in government borrowing costs, which has fuelled speculation of more spending cuts or tax rises.
The Tories have accused the chancellor of having “fled to China” rather than explain how she will fix the UK’s flatlining economy, while the Liberal Democrats say she should stay in Britain and announce a “plan B” to address market volatility.
Former prime minister Boris Johnson said Ms Reeves had “been rumbled” and said she should “make her way to HR and collect her P45 – or stay in China”.
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1:14
Chancellor’s ‘pragmatic’ approach to China
Image: The chancellor visits a Brompton bike shop in Beijing. Pic: AP
However, during a visit to Beijing’s flagship store of UK bike maker Brompton, Ms Reeves said she would not alter her economic plans, with the October budget designed to return the UK to economic stability.
“Growth is the number one mission of this government,” she said.
“The fiscal rules laid out in the budget are non-negotiable. Economic stability is the bedrock for economic growth and prosperity.”
The treasury added that making Britain better off will be at the “forefront of the chancellor’s mind” during her visit.
She said that “action” will be taken to meet the fiscal rules. That action is reported to include deeper spending cuts than the 5% efficiency savings already expected to be announced later this year, while cuts to the welfare bill are also said to be under consideration.
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The UK has laid out a new economic relationship with China, and to use one of China’s favourite phrases, both countries are selling it as a “win-win” situation.
It’s a significant development in restoring ties between the countries. The relationship has been beset by years of tension and suspicion. Both sides want to get it back on track.
China delivered a warm welcome for the chancellor.
Rachel Reeves was shuttled from a Beijing Brompton bike shop, to the Great Hall of the People and on to a state guest house.
China’s vice premier He Lifeng said: “The outcomes we have agreed today represent pragmatic co-operation in action.”
Pragmatic. There is that word again. Chancellor Reeves uttered it four times in her closing statement.
Despite the bonhomie, China is still likely to view these British overtures with caution.
She met her counterpart, Vice Premier He Lifeng, in Beijing on Saturday to discuss financial services, trade and investment, before heading to Shanghai for talks with representatives across British and Chinese businesses.
Image: Britain’s Foreign Secretary David Lammy and Chinese Foreign Minister Wang Yi in Beijing. Pic: AP
On Friday, Culture Secretary Lisa Nandy defended the trip, telling Sky News that the climbing cost of government borrowing was a “global trend” that had affected many countries, “most notably the United States”.
“We are still on track to be the fastest growing economy, according to the OECD [Organisation for Economic Co-operation and Development] in Europe,” she told Anna Jones on Sky News Breakfast.
“China is the second-largest economy, and what China does has the biggest impact on people from Stockton to Sunderland, right across the UK, and it’s absolutely essential that we have a relationship with them.”
Rachel Reeves’s trip to China – the first by a British chancellor since 2019 – was always going to be controversial.
In recent years Conservative governments have been keeping Beijing at arm’s length – amid concern about espionage, the situation in Hong Kong, and the treatment of the Uyghurs.
David Cameron’s so-called “Golden Era” of engagement in the pursuit of economic investment, notoriously capped by a visit to an Oxfordshire pub for a pint with President Xi Jinping – has been widely written off as a naive mistake.
There are many – not least the incoming US President Donald Trump – who believe we should maintain our distance.
But in another era of economic turmoil, the pursuit of growth is the government’s number one priority.
This week’s difficult market news – with the cost of government borrowing surging, and the value of the pound falling – has thoroughly raised the stakes.
It is the first UK-China Economic and Financial Dialogue (EFD) since 2019, building on the Labour government’s plan for a “pragmatic” policy with the world’s second-largest economy.
Sir Keir Starmer was the first British prime minister to meet with China’s President Xi Jinping in six years at the G20 summit in Brazil last autumn.
Relations between the UK and China have become strained over the last decade as the Conservative government spoke out against human rights abuses and concerns grew over national security risks.
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2:45
How much do we trade with China?
Navigating this has proved tricky given China is the UK’s fourth largest single trading partner, with a trade relationship worth almost £113bn and exports to China supporting over 455,000 jobs in the UK in 2020, according to the government.
During the Tories’ 14 years in office, the approach varied dramatically from the “golden era” under David Cameron to hawkish aggression under Liz Truss, while Rishi Sunak vowed to be “robust” but resisted pressure from his own party to brand China a threat.
The Treasury said a stable relationship with China would support economic growth and that “making working people across Britain secure and better off is at the forefront of the chancellor’s mind”.
Ahead of her visit, Ms Reeves said: “By finding common ground on trade and investment, while being candid about our differences and upholding national security as the first duty of this government, we can build a long-term economic relationship with China that works in the national interest.”
Photographed in a beam of sunlight, Prince William walked through Westminster Abbey with the King behind him.
The ornate robes of the Order of the Bath service, two weeks ago, felt like a world away from the more modern image he wants to portray.
But as a man bestowed with so many traditional titles, it’s a new role he’s shaping for himself that is more intriguing – William, the quiet disruptor.
Image: The Prince of Wales at the Order of the Bath Service at Westminster Abbey. Pic: Andrew Parsons / Kensington Palace
In a week when Time Magazine named the Prince and Princess of Wales in its top 100 philanthropists list for “modernising royal philanthropy”, I spent the week following the prince on various engagements.
None of them particularly headline-grabbing, but all examples of how he’s setting out to do things differently, or underlining the challenges, and potential criticisms, he faces doing things his own way.
Take Tuesday, for example.
We weren’t expecting him to turn up as we waited at the Soho Hotel in London to watch a new series of films about the dangers faced by wildlife rangers, a project described as “the brainchild” of Prince William.
But all of a sudden, there he was in the room, taking the mic to explain what it really means to him.
Speaking about his drive to “give a voice to the voiceless”, it was indicative of what feels like a greater desire from him to articulate more publicly what he stands for.
Since November, when he described how he wanted to carry out his duties with “a smaller r in the royal”, you’ve got the sense William, and his team, have further wanted to cement in our minds where he sees his role.
From conversations this week, with those who work closely with him, the word “convening” came up time and again; the prince doesn’t want to waste what he knows is a unique position, to bring people together, start conversations and support those who are already doing amazing things in their communities.
Image: Prince William recording the opening scenes for a documentary about rangers and the dangers they face.
Pic: PA
Shifting the dial
But this isn’t just about him personally.
This is now a man whose vision for the monarchy, I’m told, is increasingly driven by a desire to “shift the dial on global leadership” where others may be failing.
With palace sources telling me he’d be more than happy to “be acknowledged” as a quiet disruptor, despite the criticism his new ways of working might bring.
Those who’ve known him a long time will tell you this compulsion to do things differently has been there for some time.
Image: Prince William during a recent royal visit.
Pic: PA
Dr Tessy Ojo, the chief executive from The Diana Award, has worked with Prince William and Prince Harry for over 20 years.
She said: “They would never do royal engagements from the sense of cutting the ribbon or simply being poster people. We were very clearly warned if you wanted any form of engagement, it almost had to have a whole strategy behind it.”
She told me she has always sensed how much William appreciates the responsibility that comes with his role, especially in a world where “there’s a massive demand on leadership… there’s a lot of distrust on leaders”.
“What people wanted 40 years ago from their monarch is completely different,” she said.
“I think it’s super important that as the heir, as the next monarch, he’s very in tune with what the people want, and what people expect. And being able to be that 21st century monarch, who is a present dad, but also a leader who understands how to use your leadership for social good”.
A modern royal
Wednesday, and William walked into a sweaty, but infectiously positive, community hall in Leith in Edinburgh.
No ribbon cutting here, but this is the kind of visit the prince now sees as a big deal, “impact” the buzz word ahead of any engagement now.
A very lively game of football launching what they hope will be a long-term tie-up between the Royal Foundation (their charitable trust), Leith community centre and Street Soccer Scotland.
Image: The Prince of Wales playing football during the visit to Leith.
Pic: PA
Image: Pic: PA
On Thursday, the sight of a guard of honour saluting the prince and princess, as the national anthem was played alongside HMS Glasgow, just emphasised the regular handbrake turns they face from the more relaxed to the formal, as they want to make the monarchy feel connected and relevant.
Then there is family to consider, in a way that past generations just haven’t.
Their working diaries are now arranged around their children. They’ve made no secret of that.
On paper, it means fewer engagements compared to other members of the family, and it has led to mutterings of that word no one within the palace wants to hear: “workshy”.
Image: The Prince and Princess of Wales attend the naming ceremony for HMS Glasgow.
Pic: PA
Making an impact?
But talking to people in Glasgow, away from the royal visit, I overwhelmingly found most thought William was setting a good example by putting family first.
What people were less clear on was his “social impact” work and what that is all about.
The community projects may not necessarily grab as much attention as William and his advisors want, but what will be fascinating to watch is the potential long-term impact of this new kind of ethos.
As the Prince and Princess of Wales stood on the steps of Buckingham Palace at a garden party on Tuesday, pausing for the national anthem, you can’t help but wonder whether those traditional elements of royal life could face a shake-up when one day he leads the firm full time.
Understandably, no one likes to talk about transition, and Prince William certainly doesn’t shout about his thoughts on what will come.
South Western Railway (SWR) has been renationalised this weekend as part of the government’s transition towards Great British Railways.
The train operator officially came under public ownership at around 2am on Sunday – and the first journey, the 5.36am from Woking, was partly a rail replacement bus service due to engineering works.
Image: Pic: PA
So what difference will renationalisation make to passengers and will journeys be cheaper?
What is nationalisation?
Nationalisation means the government taking control of industries or companies, taking them from private to public ownership.
England’s railway lines are currently run by train operating companies as franchises under fixed-term contracts, but Labour have said they want to take control of the lines when those fixed terms end.
Image: Transport Secretary Heidi Alexander. Pic: PA
In its manifesto, the party vowed to return rail journeys to public ownership within five years by establishing Great British Railways (GBR) to run both the network tracks and trains.
Transport Secretary Heidi Alexander, who travelled on the first renationalised departure from London Waterloo, said, before boarding, it was “a new dawn for our railways” and “a watershed moment”.
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“But I know that most users of the railway don’t spend much time thinking about who runs the trains – they just want them to work,” she added. “That’s why operators will have to meet rigorous performance standards and earn the right to be called Great British Railways.”
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6:32
How reliable are UK trains?
How will ticket prices be affected?
Labour have argued cutting off payments flowing into the private sector could save the taxpayer £150m a year.
But the government has not explicitly promised the savings made from nationalisation will be used to subsidise fees.
It is unlikely rail fares will fall as a result of nationalisation, rail analyst William Barter told Sky News.
“The government could mandate fare cuts if it wanted to, but there’s no sign it wants to,” he said.
“At the moment, I’m sure they would want to keep the money rather than give it back to passengers. The current operator aims to maximise revenue, and there’s no reason the government would want them to do anything differently under government control.”
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0:54
UK has most expensive train tickets in Europe
What difference will it make for passengers?
Britain’s railways are frequently plagued by delays, cuts to services and timetable issues, but Mr Barter said nationalisation will make very little day-to-day difference to passengers.
There was “no reason to think” the move would improve issues around delays and cancellation of services, he said.
“It’s going to be the same people, the same management,” he explained.
“The facts of what the operator has to deal with in terms of revenue, infrastructure, reliability, all the rest of it – they haven’t changed.”
Image: Pic: iStock
Which services are next to be nationalised?
In the longer term, the move is likely to bring “a degree of certainty compared with relatively short-term franchises”, Mr Barter said, noting the government would only want to renationalise a franchise “because in one way or another something very bad is going on in that franchise, so in a way it can only get better”.
It also means the government will have greater accountability for fixing problems with punctuality and cancellations.
Mr Barter said: “If this is the government’s baby, then they’re going to do their best to make sure it doesn’t fail. So rather than having a franchise holder they can use as a political scapegoat, it’s theirs now.”
He added: “In the short term, I don’t think you’d expect to see any sort of change. Long term, you’ll see stability and integration bringing about gradual benefits. There’s not a silver bullet of that sort here.”
Britain’s railway services were privatised in the mid-1990s.
Image: South Western Railway came under public ownership at around 2am on Sunday. Pic: PA
Now, all services run by private companies will be renationalised as contracts reach the end of their minimum terms, with the process due to be completed by the end of 2027.
The next operator’s services to be brought under public control will be c2c – which runs between London and Essex – on 20 July, with Greater Anglia following in October, before seven more companies transfer over when their franchises end in the future.
Operators that were already under public ownership are LNER, Northern, Southeastern and TransPennine Express.
Alan Yentob, the former BBC presenter and executive, has died aged 78.
A statement from his family, shared by the BBC, said Yentob died on Saturday.
His wife Philippa Walker said: “For Jacob, Bella and I, every day with Alan held the promise of something unexpected. Our life was exciting, he was exciting.
“He was curious, funny, annoying, late, and creative in every cell of his body. But more than that, he was the kindest of men and a profoundly moral man. He leaves in his wake a trail of love a mile wide.”
Yentob joined the BBC as a trainee in 1968 and held a number of positions – including controller of BBC One and BBC Two, director of television, and head of music and art.
He was also the director of BBC drama, entertainment, and children’s TV.
Yentob launched CBBC and CBeebies, and his drama commissions included Pride And Prejudice and Middlemarch.
Image: Alan Yentob (left) with former BBC director general Tony Hall in 2012. Pic: Reuters.
The TV executive was made a Commander of the Order of the British Empire (CBE) by the King in 2024 for services to the arts and media.
In a tribute, the BBC’s director-general Tim Davie said: “Alan Yentob was a towering figure in British broadcasting and the arts. A creative force and a cultural visionary, he shaped decades of programming at the BBC and beyond, with a passion for storytelling and public service that leave a lasting legacy.
“Above all, Alan was a true original. His passion wasn’t performative – it was personal. He believed in the power of culture to enrich, challenge and connect us.”
BBC Radio 4 presenter Amol Rajan described him on Instagram as “such a unique and kind man: an improbable impresario from unlikely origins who became a towering figure in the culture of post-war Britain.